Investors walk away from F1

[WhiteBlue]

The Guardian printed an article about sports debts in trouble: http://www.guardian.co.uk/business/2009 ... ter-united

At Formula One, debt investors have even deeper concerns. Senior debt issued to fund private equity firm CVC Capital's 2006 takeover of the sport's commercial rights is trading at 51p in the pound.

So the billion $$ bond CVC took out to finance F1 is down to halve the value it started with. A lot of that has to do with profit expectations and the outlook on risk of the investment. Bonds are not very risky as they are first honored before equity takes proceeds from a failure. The bad rating must mean that bankers see very low profits ahead and that could well be due to the muscle FOTA has developed and the noises from FIA to clip FOMs wings.

[alexbarwell]

Could be wrong on some of this but isn't CVC Bernie's outfit? If I recall correctly run in his wife's name and seeing as how the divorce is looking to happen and loads of financial bits have been put in her name and offshore, the net result is that she looks to be taking him to the cleaners - I think this would go a long way to junking any stocks in Bernie inc...

[WhiteBlue]

Its the other way round Alex. Bernie works for CVC on a wage beside being a share holder in FOM. 98% of Bernie and Slavia's dough is out of F1 in off shore investments of different nature.

[Carlos]

It's a quote from wikipedia which is usually ... but sometimes not - up to date.

"SLEC Holdings was created as the holding company of the Formula One companies in 1996 when Bernie Ecclestone transferred his ownership of Formula One businesses to his wife, Slavica Ecclestone, in preparation for a 1997 flotation ..."

But a lot has changed since then. It was sold off as we know.

The article is a financial history of who had what, when and how much they got for it. Sorry to say it makes F1 sound sort of like a worn out trollop ( that's a sex worker in contemporary speech) not that there's anything wrong em) it. From 1974 to till today. I can recommend it because I can understand it
http://en.wikipedia.org/wiki/Formula_One_Management
Theres a lot of side deals and companies involved.

EDIT - Yeah I agree ISLAMATRON. The Canadian government was willing to put out big bucks so we could put up those little white lawn signs with the red maple leaf around the course. Never understood that. Most people know the Canadian Gran Prix happens in Canada ... but this time I appreciate tax dollars spent on my favorite sport.

[ISLAMATRON]

Alot of stupid business move by BE lately... why cancel USGP & Canada GP when they were bringing in millions and not replace them with anything.

2005-19 races
2006-18 races
2007-17 races with all 3
2008-18 with Canada & France, no USGP
2009-17 races without any of the 3

If those races were bringing in even 1 dollar for FOM why remove them and replace them with nothing? That is a loss of potential revenue... The Canada govt was offering all types of extra money and Bernie turned it down, and has yet to replace that money with a new race.

17 races this year with the 3 that were profitable at least for FOM, would have been the 20 that is everybody's goal and upper limit.

Bernie is really losing it.

[Fil]

If a race is not profitable, that is regarding the race promotors, not Bernie. The reason so many races are not profitable are due to the extravagant fees they must pay FOM for the rights to host.

Don't forget all on-track advertising $$ goes straight to FOM too.

Every race makes money for FOM; a lot of money. That's why Bernie pushes for the maximum number of races each season. its the teams that want less races as it costs them money to race.

IIRC, Bernie only promotes 1 race, Belgium, but that is a deal with the local govt there, so again, i doubt he'd have taken it on without a lucrative deal to ensure he doesn't stand a chance of losing money on it.

[ISLAMATRON]

exactly, that why we should have never had less than the 19 races we had back in 2005 over the last 3 seasons, bernie lost out on 4 races worth of revenue but thus far and 2 more this year but in actuality more like 7 races worth of revenue, with what FOM rakes in per race were talking about a cool hundred mil, maybe that's why his wife is leaving him!

[alexbarwell]

Thanks for the correction - knew I was off somewhere. SLEC was the outfit I was thinking of. Seems a major problem with F1 is that there is a lot of business interest at the expense of racing/sport interest - just think of the number of races/situations that were decided by lawyers/FIA meetings. But maybe if the big corporate money walks away the sport can re-focus on what it should all be about.

[ISLAMATRON]

it never gets better, only worse

[xpensive]

I belong to those who believe that "the twins" hi-jacking of Formula one was a masterpiece of a financial scam. The way they managed to keep the manufacturers on and paying for the show was simply brilliant.

Here lies the strategy which race-locations chosen, corrupt dictatorships with zero transparency in the Mid-east and Asia, fits like a glove for the overall purpose of milking the sport as far as possible.

[Conceptual]

I belong to those who believe that "the twins" hi-jacking of Formula one was a masterpiece of a financial scam. The way they managed to keep the manufacturers on and paying for the show was simply brilliant.

Here lies the strategy which race-locations chosen, corrupt dictatorships with zero transparency in the Mid-east and Asia, fits like a glove for the overall purpose of milking the sport as far as possible.

Just wait till the Carbon taxing and Carbon Offset stuff kicks in!

It will be a whole new niche busted open by the FIA/NWO...

And lets not forget the Superlicense Fees.....